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A Momentous Change is Underway in the Egg Case

Posted by Elanor Starmer, AMS Administrator in Food and Nutrition
Feb 21, 2017
Hens outside
Less than 30 million of the over 300 million hens that lay our nation’s eggs are raised in cage free systems. AMS is committed to working with the U.S. egg industry to facilitate their efforts to address this challenge.

Have you been to a supermarket to buy a carton of eggs lately?  If so, you may have found an array of food marketing claims on the packages.  All natural, organic, cage-free, pasture-raised, free range, non-GMO, raised without antibiotics, Omega-3 enriched and vegetarian-fed diet are just a small sample of the many claims consumers might see in the egg case. The modern food shopper is inundated by choice.

From its inception, the role of AMS has been to facilitate an efficient, fair, and competitive marketing system to benefit producers and consumers.  One of the ways AMS accomplishes this is by establishing and applying grade standards to different agricultural products. Terms such as “Grade A” and “Large” have become a trusted part of the American egg vocabulary, helping both farmers and consumers with descriptive labels. Other marketing terms that now appear on egg cartons have evolved to reflect consumers’ demand to understand things like where the eggs come from, how chickens were raised and who raised them.

Over the past few months, a new trend has emerged with the potential to greatly impact our egg producers and impact what consumers see on store shelves.  A significant number of large institutional buyers of eggs and egg products have announced that within 10 years, they intend to purchase eggs from only cage-free production systems. There are a variety of reasons for these announcements. But there is no doubt that the change will be a big one for the industry.

Today, fewer than 30 million of the over 300 million laying hens in the U.S. are raised in cage free systems. In other words, less than 10 percent of our egg supply is produced in cage-free systems such as organic, pasture-raised, or indoor cage free systems.  To meet buyers’ new commitments, the industry will need to convert over half of their production to cage free systems by 2025.

Assuming American egg consumption remains the same at about 260 eggs per person each year, new housing systems will need to be built for an additional 140 million or more cage free hens. Egg producers estimate that it costs approximately $40 per bird to build a cage-free production system – so the new commitments could cost on U.S. egg producers $5.6 billion to build the needed cage free systems by 2025. That’s not counting other tools they will need, including research and assistance in dealing with flock management and different health and disease factors specific to cage-free systems.

As egg producers look ahead to these challenges, our staff is working right alongside them.  Our analytic and voluntary Market News reporting resources will provide an ongoing measure of the market shift and what will be required to meet the potential demand, while we continue to monitor and report any changes.  AMS is also working with sister agencies to help coordinate resources that can help the industry in other areas like research.

U.S. agricultural producers are innovative and adaptive, but momentous changes like the proposed shift to cage-free will require all hands on deck – and a good, hard look at what such a shift would take. AMS will be there to help.

Category/Topic: Food and Nutrition

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Comments

Brian
Jun 27, 2016

How are buyers/suppliers going to transport chickens without cages?

Ben Weaver
Jun 27, 2016

@Brian - thanks for the comment. The cage free label indicates that the egg laying hen was not kept in a cage and, instead, able to freely roam a building or pasture with unlimited access to food and fresh water during their production cycle. However, this doesn’t relate to the transport of egg laying hens from one location to another.

Don Hoenig
Jun 28, 2016

Hello Eleanor,
I think you confuse the issue even more right off the bat with a photo caption in which you refer to eggs raised in "cage-free systems" but the photo shows hens in a free range setting.
Cage-free is not free range.
You are correct by stating that consumers are definitely confused by the plethora of labels and more clarity needs to be provided in the marketplace. Please feel free to check out the American Humane Association's laying standards at humaneheartland.org. AHA has standards for four types of laying hens- enriched colony housing, cage-free, free range and pasture raised and the definitions are clear. Thanks for your blog.
Don Hoenig
MIM Consulting
Belfast, Maine

Cintia
Jun 28, 2016

Searched all through this webpage and cannot figure out who/what AMS is ... So, AMS, whoever/whatever you are ... you are doing a great service for the hens. Set them all free!

tcl
Jun 29, 2016

AMS is Agricultural Marketing Services, a division of the US Ag Service. Fairly easy to find.

Lewis
Jun 29, 2016

Great to see AMS blogging on this industrywide trend. Will AMS be matching this trend by requiring cage-free eggs in its commodity procurement specifications?

Alyssa Ferd
Jul 06, 2016

This is a great initiative and it will help consumers a great deal. I often find it difficult to tell exactly what food manufacturers mean with things like eggs and the different language they use to describe the product. I want to make an ethical choice but it is hard to do so when you need to make a choice quickly, so clearer labeling will be a positive thing.

Jerry Harris
Jul 09, 2016

Who will certify terms like "cage free"? Will the egg producers self certify or will AMS or another inspecting agency certify? If so will that satisfy USDAs labeling requirements if another agency certifies?

Mark D. Pasewark
Jul 18, 2016

If I read the numbers correctly, the article's 260 eggs/annum represents table eggs. Is the cage free push just for table eggs bought by the consumer, or does it also relate foods in which egg is used as an ingredient.

Ben Weaver
Jul 19, 2016

@Jerry Harris - thanks for your interest in this topic. Several private organizations provide certification services, each with their own standards for what the term means. USDA currently verifies cage-free claims under two voluntary, fee-for-service programs: First, any product that has been quality graded by USDA and packed in a carton with an official U.S. grade mark (a U.S. Grade AA shield, for example) is reviewed by the Agricultural Marketing Service to ensure the labeling claims are truthful and not misleading. If a shielded carton also bears the claim “cage-free,” a USDA representative visits the farms to verify the statement is true, and follows through to the processing and packing facilities to ensure product traceability back to the cage-free source flock.

Second, eggs that are produced and marketed under the National Organic Program (NOP) are required to be raised in a cage-free system with access to the outdoors. Organic producers are certified through accredited third-parties who verify that production practices comply with NOP standards and requirements.

Ben Weaver
Jul 19, 2016

@Don Hoenig - Thank you for the information. The term “cage-free” encompasses a variety of systems that do not confine the birds to cages and allows them to free roam in a building or pasture with unlimited access to food and fresh water during their production cycle.

There are several private organizations that have developed their own definition and standards for different cage-free production systems, and provide certification services to companies who follow their standards. While there is no mandatory federal requirement that cage-free claims be verified through third-party certification, USDA does verify cage-free claims under two voluntary, fee-for-service programs: First, any product that has been quality graded by USDA and packed in a carton with an official U.S. grade mark (a U.S. Grade AA shield, for example) is reviewed by the Agricultural Marketing Service to ensure the labeling claims are truthful and not misleading. If a shielded carton also bears the claim “cage-free,” a USDA representative visits the farms to verify the statement is true, and follows through to the processing and packing facilities to ensure product traceability back to the cage-free source flock.

Second, eggs that are produced and marketed under the National Organic Program (NOP) are required to be raised in a cage-free system with access to the outdoors. Organic producers are certified through accredited third-parties who verify that production practices comply with NOP standards and requirements.

Ben Weaver
Jul 19, 2016

@Lewis - thank you for the inquiry. The purpose of the USDA Foods purchase programs is two-fold: to support domestic agricultural production through the purchase of American agricultural foods, and to supply nutritious, high quality foods to federal food and nutrition assistance programs, including the National School Lunch Program (NSLP) and the Emergency Food Assistance Program (TEFAP). Due to the limited availability of cage-free eggs in current domestic marketplace, USDA does not require that the eggs we purchase as USDA Foods come from cage-free sources.

Ben Weaver
Jul 20, 2016

@Mark D. Pasewark - thanks for the great question. The 260 eggs per year are table eggs (eggs for human consumption, not hatching eggs). Firms that have committed to using 100 percent cage-free eggs in their business process include those that use either shell eggs, egg products, or a mix of both. Ultimately, the products they produce will be bought by the consumer whether it is in the form of a shell egg, pancake mix, or an egg product.